Given the Trump administration’s vocal and demonstrated support for crypto, some investors are wondering whether gold’s days as the world’s favorite hedge asset are numbered.

André Dragosch, European head of research at Bitwise Asset Management, suggests the choice isn’t so simple. In a post on X Saturday, he offered a rule-of-thumb: gold still works best as protection against stock market losses, while bitcoin increasingly acts as a counterweight to bond market stress.

Gold: Equity Hedge of Choice

The reasoning starts with history. When equities sell off, investors often rush into gold. Decades of market data back this up. Gold’s long-run correlation with the S&P 500 has hovered near zero, and during market stress it often dips negative.

For example, in the 2022 bear market, gold prices rose about 5% even as the S&P 500 tumbled nearly 20%. That pattern illustrates why gold is still considered the classic “safe haven.”

Bitcoin: A Bond-Market Counterweight

Bitcoin, by contrast, has often struggled during equity panics. In 2022, it collapsed more than 60% alongside tech stocks. But its relationship with U.S. Treasuries has been more intriguing.

Several studies note that bitcoin has shown a low or even slightly negative correlation with government bonds. That means when bond prices sink and yields rise — as they did in 2023 during fears over U.S. debt and deficits — bitcoin has sometimes held up better than gold.

Dragosch’s takeaway: investors don’t need to pick one over the other. They play different roles. Gold is still the better hedge when stocks wobble, while bitcoin may help portfolios when bond markets are under pressure from rising rates or fiscal worries.

How the Rule Holds in 2025

The split has been clear this year. As of Aug. 31, gold was up more than 30% year-to-date, according to World Gold Council data. That surge reflects renewed demand during bouts of equity volatility tied to tariffs, slowing growth, and political risk.

Bitcoin, meanwhile, has gained about 16.46% this year, based on CoinDesk Data, a solid performance considering that 10-year U.S. Treasury yields have fallen around 7.33%, according to MarketWatch data.

The S&P 500, by comparison, is up roughly 10% in 2025, per CNBC data.

The diverging performance underscores Dragosch’s heuristic: gold has benefited most from equity jitters, while bitcoin has held its ground as bond markets wobble under the weight of higher yields and heavy government borrowing.

Not Just Opinion: Data Backs It

This isn’t just Dragosch’s personal view. A Bitwise research report earlier this year noted that gold remains a reliable hedge against stock market downturns, while bitcoin has tended to provide stronger returns during recoveries and shows lower correlation with U.S. Treasuries. The report concluded that holding both assets can improve diversification and optimize risk-adjusted returns.

The Caveats

Still, correlations aren’t static. Bitcoin’s ties to equities have strengthened in 2025 thanks to large inflows into spot ETFs, which have brought in billions from institutional investors.

The huge net inflows into spot Bitcoin ETFs makes BTC trade more like a mainstream risk asset, reducing its “purity” as a bond hedge.

Short-term shocks can also scramble the picture. Regulatory surprises, liquidity squeezes, or macro shocks may move both gold and bitcoin in the same direction, limiting their usefulness as hedges. Dragosch’s rule-of-thumb, in other words, is just that — a heuristic, not a guarantee.

The Bottom Line

Trump’s pro-crypto stance raises a provocative question: is it time to abandon gold entirely in favor of bitcoin? Dragosch’s answer, supported by years of data, is no. Gold still works best when stocks tumble, while bitcoin may offer shelter when bonds are under pressure. For investors, the lesson isn’t ditching one asset for the other, but recognizing that they hedge different risks — and using both may be the smarter play.

Warren Buffett’s tremendous success as an investor didn’t come from trying to time the market, nor from predicting which stocks would go up or down in the near term. Those are impossible tasks, he has noted on multiple occasions. Instead, the primary thing that Buffett and his team at Berkshire Hathaway (BRK.A 0.29%) (BRK.B 0.10%) do is try to determine whether a business, at that particular moment, is worth more or less than its market price.

That strategy has led to some phenomenal results. Berkshire Hathaway stock has grown at a compound annual rate of about 20% since 1965, when Buffett took control of what was then a failing textile business. To put that in perspective, the S&P 500 (^GSPC -0.01%) has produced compound annual returns of just 10.4% over that time. 

As impressive as that may sound, it can be hard to grasp just how vast that difference becomes when compounding has decades to work its magic. From 1965 through 2024, an investment in the S&P 500 (with dividends reinvested) would have multiplied in value by about 390 times. The same investment in Berkshire would have risen by more than 55,000 times.

In short, buying stocks that are fundamentally worth more than the market thinks they are works. But in recent times, Buffett has concluded that many of the equities in Berkshire’s portfolio might not be worth as much as the market is paying for them. Further, he has found the pickings quite slim in terms of potential new equity holdings to buy. As a result, Berkshire Hathaway has been a net seller of stocks for 10 consecutive quarters. In that period, Buffett and his team have sold $174 billion more in stocks than they bought.

Two of the biggest positions recently getting trimmed at Berkshire Hathaway were Apple (AAPL 0.46%) and Bank of America (BAC 0.64%). The conglomerate cut its stakes in them by 67% and 39%, respectively. With some of the proceeds from those sales and others, Buffett has been piling into a high-yield investment that’s paying around 4.3% as of this writing.

Image source: The Motley Fool.

Cutting some of his biggest holdings

At one point, Apple stock accounted for more than half the value of Berkshire’s equity portfolio. Buffett first purchased shares of the iPhone maker in 2016 when it traded for around $25 on a split-adjusted basis. Over the next few years, he built a massive stake in the stock, pouring an estimated $36 billion into it by late 2018.

When Buffett made his initial investment in Apple, it was trading at a P/E multiple of around 10. That was an incredible value for the stock, even as the company was experiencing a downturn in net income. Buffett saw the value of the iPhone and the Apple ecosystem, noticing how attached people were to their smartphones. He expected the business to turn around, thanks to Apple’s brand strength, its leading position in smartphones, and its strong free cash flow. Sure enough, the stock soared over the next eight years.

But by late 2023, it had climbed to above 30 times earnings, which is an extremely high multiple for a company growing its earnings per share at a single-digit percentage annual rate. That was enough to convince Buffett to start taking some cash off the table. From October 2023 through September 2024, he sold more than two-thirds of Berkshire’s stake in the tech giant.

Apple remains the largest holding in Berkshire’s portfolio, accounting for nearly 22% of its value. But given its forward P/E of 29, it’s unlikely that Buffett plans to start adding to the position again in the near future, absent any significant developments.

Bank of America was Berkshire’s second-largest holding as of last summer. But over the last three quarters, Berkshire has trimmed its stake in the company by 39%. Bank of America remains Berkshire’s third-largest holding based on the company’s most recent 13F filing with the Securities and Exchange Commission. But Buffett may have continued selling the stock in the second quarter.

Berkshire’s original stake in Bank of America came from stock warrants received in connection with preferred shares Buffett picked up in 2011 through a special deal he made while Bank of America was struggling. Those preferred shares paid nice dividends, but in 2017, it became more lucrative to own the common stock instead. So, Buffett exercised his warrants and converted the preferred shares into common stock, then proceeded to gradually add to the position through 2020.

Again, valuation seems to be the biggest reason for Buffett’s decision to book some profits on his Bank of America investment. The stock’s run-up in price has been fueled by expectations that interest rates will decline. Bank of America has longer-dated debt on its balance sheet that struggled when the Federal Reserve was hiking interest rates, but that will leave it well positioned relative to its peers when interest rates decline. But as the stock price climbed over the past couple of years, its price to tangible book value did too. That ratio has exceeded 1.6 for much of the past year. It currently trades closer to 1.7, well above its 10-year average of 1.49.

The investment paying Berkshire $13.5 billion per year

Those massive stock sales put a lot of cash in Berkshire Hathaway’s coffers. As mentioned, Buffett’s stock sales outpaced his purchases by $174 billion over the past two and a half years. While a sizeable chunk of that cash went toward paying Berkshire’s massive tax bill from last year, almost all of the rest went toward a single investment holding.

As of the end of the first quarter, Berkshire held $314.1 billion in U.S. Treasury bills on its balance sheet. With those bonds delivering an average yield of around 4.3%, the company is in line to collect $13.5 billion in 2025 just from interest on its government bond holdings. That number could climb higher if Buffett buys more T-bills throughout the year.

A $13.5 billion payout for doing nothing but supporting the U.S. government isn’t a bad deal. Berkshire’s total income from operations in 2024 was $47.5 billion. But Buffett has made it clear that he would rather invest Berkshire’s growing pile of cash (Treasury bills are considered a cash equivalent) in equities instead of bonds.

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities,” Buffett wrote in his 2024 letter to shareholders.

The challenge Buffett currently faces is that most stocks on the market are expensive from a valuation standpoint. That’s especially true for stocks that he could buy in quantities large enough that they could actually move the needle for a giant like Berkshire Hathaway. With nearly $350 billion to deploy, Berkshire’s universe of investable stocks is limited to those with large market caps that can absorb billions of dollars of capital. Unfortunately, large-cap stocks trade at much higher valuations these days. Illustrating that trend, the S&P 500’s forward P/E ratio has climbed above 22 to one of its highest levels since the dot-com bubble, save for a few quarters in 2020 and 2021 (ahead of the 2022 bear market).

If Buffett were a smaller investor with just a few million dollars to invest, he’d surely be able to find great opportunities in the market. The small- and mid-cap indices trade for around 16 times expected forward earnings. Even the equal-weight S&P 500 index trades at just 17.6 times earnings, reflecting the fact that smaller members of the index are trading at more attractive values than its largest components.

Investors who take the time to research individual companies outside of the largest and most well-known names in the market can find some great companies worth more than their current market values. And if you consistently buy those stocks, you can generate excellent returns over the long run.

Vitalik Buterin has proposed a long-term overhaul to Ethereum’s execution environment to replace the Ethereum Virtual Machine with RISC-V, a standardized and extensible instruction set architecture.

The proposal, shared in the Ethereum Magicians forum on April 20, outlines a multi-phase shift to improve proving efficiency and simplify the execution layer, without changing core abstractions like accounts, storage, or cross-contract calls.

The change would retain Solidity and Vyper as primary development languages, which would be adapted to compile to RISC-V.

Per Buterin, while writing contracts directly in Rust would be technically possible, readability concerns and developer familiarity with existing languages suggest that Rust will not replace Solidity at the application layer. Existing EVM contracts would continue to operate and interact fully with new RISC-V-based contracts, preserving backward compatibility.

Execution bottlenecks and long-term scaling

Buterin identified execution as one of Ethereum’s final long-term bottlenecks, after near-term issues are mitigated by EIPs such as delayed execution, block-level access lists, and distributed historical storage.

In particular, he pointed to proving costs in ZK-EVMs as the key constraint for future scalability. Analysis from Succinct’s ZK-EVM indicates that block execution alone accounts for nearly half of all prover cycles, while the remainder is consumed by witness data handling and state tree operations.

While state-related overhead can be reduced by shifting from Keccak-based Patricia trees to binary trees with prover-optimized hash functions such as Poseidon, block execution efficiency will remain limiting unless the EVM is addressed directly.

Buterin noted that ZK-EVMs already compile to RISC-V under the hood, suggesting that exposing RISC-V as the primary VM could eliminate a layer of abstraction and yield efficiency gains. Some test scenarios reportedly show 100x improvements in prover performance by bypassing EVM translation altogether.

Coexistence, migration, and simplification paths

Multiple implementation pathways are under consideration. The most conservative would allow dual support for both EVM and RISC-V contracts, maintaining interoperable calls and shared access to persistent state. EVM contracts would continue to function and could call into or be called by RISC-V contracts via system calls mapped to traditional opcodes such as CALL, SLOAD, and SSTORE.

A more aggressive approach involves transforming existing EVM contracts into wrappers that delegate execution to an EVM interpreter written in RISC-V. Under this model, a contract’s bytecode would be replaced with logic that routes calls and execution parameters to a designated RISC-V interpreter contract, receives the return value, and forwards it to the caller.

An intermediate strategy proposes protocol-level support for virtual machine interpreters, enshrining this delegation process and enabling multiple execution formats to coexist. While EVM would be the first VM supported under this model, others, including Move, could be added in the future.

Each approach seeks to balance compatibility with long-term simplification. According to Buterin, incremental simplifications to the EVM, such as removing SELFDESTRUCT, have proven difficult due to complex edge cases and legacy behaviors.

A complete transition to RISC-V could enable a more maintainable base layer with minimal execution logic, comparable in compactness to projects like Tinygrad that enforce strict codebase limits.

Broader design philosophy and alignment with Beam Chain

The proposal aligns with ongoing efforts like the beam chain initiative, which aims to simplify Ethereum’s consensus mechanism. The RISC-V plan would bring parallel improvements to the execution layer, enabling the network to pursue modularity and reduced complexity across both domains.

As posted on Ethereum Magicians, Buterin characterized the proposal as a radical but possibly necessary step toward realizing long-term L1 efficiency and simplicity. While active EIPs and statelessness frameworks address short- and medium-term scalability improvements, Ethereum’s future as a performant and sustainable protocol may hinge on architectural changes of this magnitude.

No timeline has been announced for any implementation phase. The Ethereum community is expected to engage in further discussion to evaluate trade-offs, tooling impact, and developer migration paths as part of a longer deliberation cycle.

The proposal remains exploratory and is intended to open a broader conversation about the direction of Ethereum’s execution environment over the coming years.

Community response

Some community members raised strategic and technical reservations in response to Buterin’s proposal. Adam Cochran questioned the prioritization of L1 efficiency at the potential expense of L2 enablement, suggesting that enshrining RISC-V could narrow Ethereum’s modular roadmap.

He highlighted alternative proposals such as recursive proof aggregation, stateless commitment roots, and BLS signature unification, which could potentially offer broader systemic gains with fewer implementation costs.

Others, including Ben A Adams, Co-founder and CTO of Illyriad Games, and levs57, a web3 developer, pointed to performance trade-offs, particularly around hardware compatibility and the persistent role of precompiles.

Concerns included the difficulty of optimizing low-level RISC-V instructions back into efficient 256-bit operations and doubts about whether current zk-RISC-V systems are sufficiently mature or auditable to justify a foundational shift.

Buterin responded by downplaying the extent to which the EVM’s 256-bit word size constrains execution, stating that most values in practice are smaller, typically u32, u64, or u128, which compilers can efficiently map to RISC-V instructions.

He reiterated that today’s ZK-EVMs already operate as RISC-V environments embedding an EVM interpreter, framing direct exposure of RISC-V as a way to remove redundant layers. While acknowledging stack management and jumps as potential friction points, he maintained that eliminating interpretive overhead remains a net gain.

Mentioned in this article